The Supreme Court has stopped a port firm from operating a new grain bulk terminal at the Mombasa port after suspending its tender awarded by Kenya Ports Authority.
A ruling rendered by a five-judge bench of the top court in the country issued orders barring the company associated with Joho namely Portside Freight Terminals Limited from developing a grain handling facility at the Port of Mombasa pending the determination of an appeal filed by Busia Senator Okiya Omtatah and Dock Workers Union.
Deputy Chief Justice Philomena Mwilu and justices Mohammed Ibrahim, Isaac Lenaola, William Ouko, and Smokin Wanjala halted the Portside Freight Terminals Limited from building a second grain facility at the port after finding the case by Omtatah is merited.
” Pending the hearing and determination of the consolidated appeal herein, a conservatory order is hereby issued restraining Portside Freight Terminals Limited, Portside CfS Limited, and Heartland Terminals Limited from constructing and developing a grain handling facility and Island Berth at G-Section, Area belonging to Kenya Ports Authority, Mombasa according to the license granted by the KPA on August 2, 2021,” the Supreme court judges ruled.
The judges held that should Portside Companies proceed to implement the project the appeal would be rendered nugatory and therefore need to preserve the status quo.
“In any event, at this stage, we are of the view that a conservatory order will, not only preserve the status quo but also save Portside Companies themselves from nugatory expenditure should the appeal succeed. The inconvenience and delay that may be occasioned to them can be compensated by an award of costs,” Mwilu led bench stated.
However, the Supreme Court directed the case to be heard on a priority basis since the dispute has been pending in the courts for nearly three years.
” To obviate any further delay and expense to Portside Companies, and in view of the importance of the project in question to the economy of this country, it is directed that the Registrar shall expeditiously finalize case management procedures for the consolidated appeal to be listed for hearing without delay,” they directed.
In his appeal Omtatah wants the apex court to overturn the court of Appeal decisions that gave Portside Freight Terminals Limited the greenlight to construct a second facility at the port.
Omtatah says the appellate court judges erred in finding that awarding of the contract to Portside was not discriminatory and that KPA and the Treasury did not breach the constitution in tapping the firm
He argues in the award of the tender there was no public participation as the KPA Board of Directors without any authority reviewed and approved the grant of license to Portside Freight Terminals.
“The procurement process was discriminative to four companies namely Kilindini Terminals Limited, Grain Terminal Limited, Kapa Oil Refinery, and Africa Ports and Terminals and the appeal is not frivolous since it raises vital and arguable points of law on the violation of the Constitution and other procurement laws,” He told the five judges.
Omtatah claims KPA board of directors, acting ultra vires, without authority and in glaring violation of the law and procedure, purported to review and approve the grant of way leave and license to operate a second bulk grain handling facility at the port of Mombasa to Portside Freight Terminals Limited.
“The KPA Board of Directors does not have the mandate to procure goods and services. That function is reserved for the KPA’s management,” Omtatah in his court papers.
It is said that KPA decided to use the Specially Permitted Procurement Procedure under the Public Procurement and Asset Disposal Act, 2015, to single source and award a license to the firm.
“It is evidently clear that KPA and the CS Treasury employed the use of Specially Permitted Procurement procedure to avoid the competition of bidder and is being applied in favor of Portside Freight Terminals Limited,” Omtatah said.
According to his court papers, the Senator says that pursuant to the public procurement laws KPA failed to invite bidders or tenderers to submit their applications for consideration for the development of the second bulk grain handling facility
KPA through its Port Master Plan 2019-2047 indicated that a second bulk grain handling facility is required by the year 2023. Further, the Master Plan planned that the new bulk grain berth be developed at Dongo Kundu or Lamu Port.
Over the years, there has been an increase in cargo throughput and container traffic at the Port of Mombasa. During the past ten years, the Port of Mombasa has experienced exponential gain imports which growth has been an agitation to liberalise grain bulk operations by allowing other additional operators and equally promoting competition in the industry.
On August 7, 2019, KPA launched its Master Plan which was described as a blueprint to define its development horizon over the next 30 years.
The Master Plan indicated that there was a need to develop a second grain bulk handling facility by the year 2023. The Master Plan was to take advantage of the development of Dongo Kundu as a Special Economic Zone, the Lamu Port and the revitalised Kisumu Port.
The second grain bulk handling facility was to be located at either Dongo Kundu or Lamu Port.
